Management Information Systems

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Management Information Systems

• MIS 503
• MBA Program

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What is MIS?
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MIS An Amalgamation of Disciplines
Information Science
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Major MIS Constituents
Technology
Organization
People
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Modified Leavitt Model
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Management of information technology policy and
strategy
Planning
Organizational structure
Applications
Encouraging users
Information systems architecture
Operations
Systems analysis and design
Database
Impact on the organization
Information systems technology
Evaluation and control
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A Framework for Managing Information Technology
Vision for the Organization and Information
Technology
IT and Organization Structure
Corporate Strategic Plan
Integration of IT and Decision Making
Strategy
Ongoing IT Operations
Alliances Partnerships
IT Initiatives
IT Infrastructure
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Todays IT Landscape

• How IT flattened the competitive landscape

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10 Flatteners

• Fall of the Berlin Wall
• Netscape IPO
• Work flow software
• Open-sourcing
• Outsourcing

• Offshoring
• Supply-chaining
• Insourcing
• In-forming
• Wireless

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This NEW Paradigm Affects Organizations in Myriad
Ways

• New Business Environment
• Open, Competitive, Dynamic Marketplace
• New Enterprise
• Open, Networked, Information-based Organization
• New Geopolitical Order
• Open, Volatile, Multipolar World
• New Technology
• New Goals of IT
• Open, User-centered, Networked Computing
• New Competition
• Your competition is no longer only the firm
  across the street

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Business Environment Changes Creating New
Challenges and Opportunities

• Worker Productivity
• Quality Emphasis
• Responsiveness to the Marketplace
• Globalization
• Outsourcing
• Communication Fluidity and Ubiquity
• Offshoring
• Partnering
• Social and Environmental Responsibility

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The New Enterprise

• Hierarchical Structure is out
• Problems with Hierarchies
• Hierarchies seek to separate governed from
  governors
• Middle managers act as a communication channel
  between top and bottom
• Information Technology has supplanted human
  relays, which has resulted in
• Flatter, Leaner Organizations

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Hierarchical vs. Open-Networked Organizations
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A Framework for IT An IT Value Chain
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Three Types of Information Systems
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A Virtual Negotiated-Agreement Organization
Virtual components in italics
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IT-Enabled Organizational Forms
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Three Shifts in the Application of IT

• From Personal to Work-Group Computing
• From Systems Islands to Integrated Systems
• Management and control of physical assets and
  facilities
• Financial management and control systems
• Technologies to manage and support human
  resources
• From Internal to Inter-organizational Computing

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Enabling Technology
The Promise
The Change
Business Process Redesign
High-Performance Team
Workgroup Computing
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Enabling Technology
The Promise
The Change
Organizational Transformation
Integrated Systems
Integrated Organization
Business Process Redesign
High-Performance Team
Workgroup Computing
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Enabling Technology
The Promise
The Change
Interenterprise Computing
Recasting External Relationships
Extended Enterprise
Organizational Transformation
Integrated Systems
Integrated Organization
Business Process Redesign
High-Performance Team
Workgroup Computing
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Summary of Work-Group Computing Shifts
Organizational Hierarchy
Business Team Organization
Personal Computing
Work-Group Computing
Emphasis on the individual
Emphasis on the group
Designing Technology
Redesigning the entire system
Taylorism
The new work reengineering
Technical Users
Direct support of all personnel
Leadership for evolving work
Installing Technology
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Islands of Technology

• Technology is implemented to manage three
  resources
• Physical Assets
• Human Resources
• Financial Assets
• What if they are not speaking to one another???

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Problems With Enterprises that arent speaking

• Redundancy of Functionality
• Miscommunications due to lack of integration
• Poor quality customer service
• Operational inefficiencies due to
  miscommunications and redundant processing
• Internal Focus

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Problems With Enterprises that arent speaking

• Systems are perpetuated in order to treat
  operational symptoms without recognizing
  fundamental problems
• Organizational conflict and turf battles erupt
  due to the historical creation of data
  processing developing financial solutions,
  engineering developing physical assets, and
  administrative groups to manage human resources

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What happens when an enterprise shifts to
integration
Technology Applications
Organizational Restructuring
System Islands
Integrated Systems
Separate Systems
Integrated Environments
Single-form Systems
Integrated data, voice, image
Cost Reduction
Enterprise Effectiveness
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What happens when an enterprise shifts to
integration
Value Chain
Value Network
Simple Market Combat
Competition via Cooperation
Manual Communications
Electronic Communication
Enterprise Technology
Interorganizational Computing
Purchaser of Information
Information Purchaser/Vendor
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8 Critical Technology Shifts

• From Traditional Semiconductors to
  Microprocessor-Based Systems
• From Host-based to Network-based Systems
• From Vendor Proprietary Software to Open Software
  Standards
• From Single to Multimedia - Data, Text, Voice,
  and Image
• From Account Control to Computer Vendor- Customer
  Partnerships Based on Free Will
• Software Development - From Craft to Factory
• From Alphanumeric to Graphical, Multiform User
  Interface
• From Stand-Alone to Integrated Software
  Applications

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Determining IT Value

• Models and Implications

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What is Value?

• The most common meaning of value is monetary
  worth
• It is difficult to determine the value of IT
  investments because such value can come from
• traditional (measurable) monetary returns
• indirect returns that may be hard to measure
• prevention of negative return from not investing
  in IT (such as loss of market share)

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Information Systems Strategic Grid
Strategic impact of applications under development
Low
High
Support (chemical firm)
Turnaround (grocery chain)
Strategic impact of existing applications
Strategic (major bank)
Factory (distributor)
High
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IT Investment Equation
P(Success/Return) P(Return on Investment Type)
x P(Conversion Success)
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Examples of IT Investment Equation
Estimate of Probability of Successful Conversion
Overall Probability of a Return the SR Index
Estimate of Return Probability Based on Type of
Project
Type of Investment
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Stock Options and IT Projects
Lucas, 1999
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But Value is not always easy to measure

• Its hard to measure directly
• In the short term, benefits may not be realized
• This has led to

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The Productivity Paradox

• Organizational IT investments have not shown a
  significant impact on a variety of productivity
  statistics
• Possible explanations are
• Results of IT spending occur locally and cannot
  be expected to show up in national statistics
• Many firms may yet have to undergo significant
  restructuring or cost cutting for the benefits of
  IT to become evident
• The measurements showing the lack of such a
  relationship may be flawed

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Barriers to Estimating IT Value

• Moores Law
• Evolving Organizational Use of Computing
• Managements Aversion to IT
• Pace of Change in Business is Exacerbating our
  ability to accurately value IT

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Perceptions of IT
Issue
IT a Cost/Liability
IT an Asset
Lucas, 1999
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Typical IT Cost Drivers
Taking Control of IT Costs - Sebastion Nokes
(2000)
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Three Types of IT Measurement

• Metrics to Manage IT Internally
• Network uptime
• Metrics for Business Unit Managers
• Detailed IT Usage Report
• Metrics for Senior Managers
• Balanced Scorecard

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IT Measurement Methods

• Applied Information Economics
• Scientific and Mathematical method
• www.hubbardresearch.com
• Balanced Scorecard
• Traditional financial measures with KPIs,
  customer perspectives and org growth, and
  learning and innovation
• www.bscol.com
• Economic Value Added
• EVA Net Operating Profit (after tax) -
  Capital x Cost of Capital
• www.sternsteward.com
• Economic Value Sourced
• Incorporates risk and time into valuation
  equation
• www.metagroup.com
• Portfolio Management
• www.metricnet.com, www.metagroup.com
• Real Option Valuation (ROV)
• Incorporates calculations for corporate
  flexibility - Black Scholes Model

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Measurement Caution

• Care in picking Key Performance Indicators (KPIs)
• Care in Benchmarking Selections
• Baldridge Syndrome
• Wallace Company
• Baldridge Award in 1990
• Bankrupt in 1991

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IT value comes in many forms
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Contributions of IT

• New ways to design organizations and new
  organization structures
• New relationships between customers and suppliers
• Opportunities for electronic commerce
• Efficiencies through EDI
• Changed basis of competition and industry
  structure
• Groupware

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Contributions of IT

• Knowledge capture and accessibility
• Increased productivity and flexibility of
  knowledge workers
• Electronic alternatives for communications and
  supervision
• Improved opportunities of competition among
  nations

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So, if you can find value, how do you mange IT?
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The Role of the Manager

• Management and not technology determines return
  on IT investments
• Successful organizations have strong IT
  leadership
• Key management decisions related to IT
• Strategy
• Value of IT
• Investing in infrastructure
• Deciding on applications
• The role of knowledge
• E-business
• Options for service
• Change management
• Managing value nets

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Political Models of IT Management
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Four IT Cultures

• IT Stars
• Big IT Spenders
• Cautious IT Spenders
• IT Laggards

Kempis and Ringbeck, 1998
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Seven Rules for Superior IT Performance

• Make IT a Priority in Product Development
• Integrate IT into Marketing
• Use IT to integrate order processing
• Shift focus of IT in administration to business
  planning
• Make IT a top management affair
• Create a customer-oriented IT service network
• Introduce integrated standard software on a
  First-Follower Basis

Kempis and Ringbeck, 1998
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Oracles Roadmap to IT Success
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Oracles Roadmap to IT Success

• Four Key Segments
• Assess Identify your corporate objectives,
  assess the IT situation, and determine cause and
  effect
• Define Set goals for IT, prioritize those goals,
  and identify obstacles
• Take Action Set a plan of action, educate staff
  and executives, and implement your plan
• Measure Measure and celebrate your success

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Assess
Oracles Roadmap to IT Success

• IDENTIFY CORPORATE OBJECTIVESSourcesCIO
  Insight Article How Successful Business
  Synchronize Business, IT
• ASSESS THE IT SITUATIONSourcesGartner
  Forecast IS Organizations Must Prove Value to
  Their EnterpriseCIO Magazine Article The
  Changing Role of the CIOCIO Insight Article Get
  Strategic Or Else
• DETERMINE CAUSE AND EFFECTSourcesGartner
  Forecast Driving Enterprise Effectiveness 2003
  CIO AgendaMeta The Role of the CIO

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Define
Oracles Roadmap to IT Success

• SET GOALS FOR ITSourcesGartner Forecast Does
  your IT Department Need a Health Check?Gartner
  Forecast IT Health Checklist
• PRIORITIZE GOALS
• IDENTIFY OBSTACLESSourcesCIO Magazine Article
  How Outsourcing Threatens IT WorkersCIO Insight
  Complexity How to Stave Off Chaos

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Take Action
Oracles Roadmap to IT Success

• SET A PLAN OF ACTIONSources Summit Strategies
  Using Oracle's E-Business Suite to Achieve
  Business ObjectivesGartner Article Oracle
  Outsourcing Pendulum Swings Toward Services
• EDUCATE STAFF AND EXECUTIVESSourcesExecutive
  Presentation Education Solution for
  OutsourcingOracle Outsourcing Online Event
• IMPLEMENTSourcesCIO Magazine Article Eleven
  Simple Rules for the Care and Feeding of Your IT
  Staff

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Measure
Oracles Roadmap to IT Success

• MEASURE SUCCESSSources IDC Study Financial
  Returns of Software as ServiceCIO Insight
  Article How Companies Prove IT